There are different protection schemes available for individuals, vehicles, houses, and even your travels. Some insurance policies, such as a car insurance cover, are compulsory whereas some are taken for an additional protection.
However, the need for protection is different for different individuals. You must consider the areas that need to be protected according to your lifestyle. Ask yourself the following questions to understand the types of insurance plans you require.
Do I really need this insurance policy?
Whether you’re buying it for yourself or your house, getting a suitable insurance policy requires market knowledge and research.
Every insurance product has a basic plan and a comprehensive plan. For example, if you are taking a car insurance plan, it is convenient to take a basic cover if you do not use the vehicle on an everyday basis. Similarly for a life insurance policy, you should decide whether to go for a term insurance or a whole life insurance coverage, considering your budget and lifestyle.
Furthermore, if you are a frequent traveller or a businessman, you should invest in a travel insurance plan. For a family man who is the sole bread-earner of the family, it is suitable to take both life and medical policies so that your family can sustain themselves in case of your untimely death or disability.
Can I do without this insurance cover?
An insurance policy is important. However, additional covers and add-ons aren’t necessarily crucial. For instance, your workplace might have a health protection policy for employees. But a personal medical policy is just as important. The coverage you receive from your work policy won’t be as comprehensive as your own.
Having said that, do not indulge in unnecessary additional covers/riders on your insurance plan. For example, taking a riot or a civil commotion rider on your vehicle in a region which is not prone for such incidents is not advisable.
Ask yourself if you really need policies like homeowners insurance or overseas medical insurance. If you want protection, you need to prioritise the insurance policies for yourself and your family and start spending on the most important ones.
What benefits will I receive through this policy?
Go through everything that your insurance policy promises to offer. Write down a list of benefits you and your family will get when you purchase a specific policy. Total sum insured, death and disability benefits, investment linked-benefits, etc. should be considered.
Go through the panel hospitals (medical insurance) and garages/workshops (car insurance) listed for your policy. See if these designations are convenient for you. Afterall, the bills of your treatments and repairs will not be covered by your policy if it is given by an unauthorised centre.
What benefits will my family get?
Depending on their types, insurance policies not only cover major expenses but they also offer a financial support to your family when you’re not around. Always check the policy brochure for the exact type of coverage, sum insured, and more. Make sure that your loved ones will not have to go through a financial crisis when you are not there to support them.
A term life insurance policy is a good option that takes care of the finances of your loved ones after your death. Moreover, if your policy offers you maturity benefits, you need to plan your premiums. Use these funds for your kids’ marriages, education, or something else of your choice.
Do I need a basic cover or a comprehensive one?
This entirely depends on your lifestyle and your coverage requirements. If you’re planning to buy health insurance, you will have to list down your needs. And if you want the policy to cover an array of scenarios, it makes financial sense to invest in a comprehensive cover.
However, a basic cover should suffice if you’re looking for a travel insurance plan. And if you want additional protection, you can always opt for riders instead. It’s good to consider the automatic travel insurance cover your credit card offers you. Though, it’s crucial to go through the fine print and see if it meets your needs.
What should I consider before buying an insurance policy?
You must buy an insurance policy that you can afford. Some policies have high premiums and paying them on a regular basis can be a financial burden. Remember that you can always update a policy and hence getting an affordable cover is a wise move.
Am I buying it from the right provider?
There are many insurance providers in the market that offer various insurance covers for you, your house, vehicle, among others. It is crucial to select the right provider so that you will not have to worry about the future of your insurance plan.
Do you research about potential providers and learn their history. You should also find out what the company’s claim resolving ratio is. This will give you a clear idea of whether you are investing in the right place or not.
What is the ‘lock-in period’ and ‘free look period’ involved?
Many policies come with a lock-in period attached to them. During this time, you will not be able to make a claim against that policy. Therefore, it is important to know if your policy also carries a lock-in period and what the duration for it is.
Similarly, a ‘free look’ period is also offered initially for an insurance policy. During this time, you can decide whether you want the policy or no. You can also cancel the plan, if you’re displeased with its offerings. In this case, the company will return your full money if you cancel it within an authorised period, which generally lasts for 10 to 15 days.
Before you begin your search for an insurance policy, understand your protection needs and budget. Along with this, you also need to know about your insurance provider. Furthermore, find out if there are any fees and charges associated with your policy. Do your research and learn more about how each insurance policy works and how the premium is calculated. With all this information handy, you’ll find it far easier to settle on the right plan.